Below is last 1 yr billet prices. It may look like fall from peak to some.
But, prices were in 33-39k for most of the yr.
When GPIL was at 460, billet price was at 41,000.
Today, GPIL is at 280, billet price is still at 41000.
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please multiply it with 4 to compare with the pre-split pre-bonus price.
@Kumar_manas right, so it was at 460 and currently it is at around 1120(280×4) for same level prices of billet.
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plus it had some debt when it was at 460, but debt free now as of date!
Also, it hadn’t started adding hira ferro EBITDA and enhanced mining capacity at that time, but it doing so for this quarter.
Finished steel prices aren’t exactly relevant for GPIL.
What matters is pellets, billets and sponge iron prices. Yes, they are down from peak.
Billet is down from 45k to 41k, but last 3 quarters earnings were also at avg 39k-40k billet prices.
Pellet avg for last 3Q was also 11.7k to 13k.
Current pellet prices are 11.6k, for october avg was 13.4k.
We have to see avg quarterly prices as that is what determines the earnings.
When prices went to peak, all of that didn’t translate into earnings. Avg price was much lower than peak price.
Similarly, now avg quarterly price would be much higher than the lowest bottom prices.
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Thanks for the detailed thesis on GPIL!
My doubt is about the projection based on Domestic pellet prices, where as GPIL looks overwhelmingly dependent on exports?
Disc: invested
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No, it is not. It is a commodity and is sold on domestic or export depending on where they get best price.
Currently, 50%+ is domestic sales as told in the concall.
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Today’s data shows very heavy buying in billet market in Raipur with avg price of 41,600.
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Just had a convesration with a long time school friend who is mainly a stainless steel trader since 15 yrs now in China. He said the demand has fallen sharply in the domestic chinese market and steel scrap prices have also seen almost 25% fall in a month. But this seems to be the bottom for now in the domestic market there as supply is not forthcoming from last few days at the current price and it has stabilized.
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Thanks, Iron ore on SGX has moved from USD 85 to USD 95 in 3 days.
Today, DCE iron ore is up 6%.
Pellet prices etc should start moving up from tomorrow.
Main problem is that we can’t predict the bottom in commodities… every time we hope that this may be the bottom and it may not fall below it… But it keeps on falling… We can only hope that price may stop falling…
today iron ore is 10% up.
Around 105 dollar from 85 dollar last week.
Thats a big enough jump and last time this happened, pellet prices crossed 12500.
However, stock is down because of selling in the mkts.
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Already down around 30% in a month. The stock is down just because of selling or prices at a global level are also affecting?
Disc: Invested
meghmani organics suffered similarly. Despite very cheap valuations, and big capex, the stock went from 120 to 80, And, then Sunil signhania fund bought the stock, on Friday, when whole mkts were deep red, meghmani was 20% upper circuit.
Similarly, GPIL was down 9% today morning, though iron ore at SGX is 8% up to 104 USD today, and now GPIL is also 5% up.
Once a big investor enters GPIL, huge upside is inevitable.
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Hello sir… Have you found any other stocks which match similar attributes and have great potential?
Thanks
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oct price was 48000, Nov was 42000, Dec is 39000
Average for the quarter would be 43000 or so…which is 5% higher than the average billet prices earlier.
From next quarter, as winter restrictions will start reducing, prices will again start moving up.
We have to look at avg quarterly price, not day to day price.
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Also sir, does your conviction for Dynpro still stand?